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MND NewsWire features plain and simple interpretations of industry related data and events written in a manner that maintains the interest of random readers while still catering to the perspective of a housing market professional.

One of the more colorful characters in the ongoing subprime drama has given in
to pressure and announced that he will forfeit about $37.5 million in severance
pay and perks that were to accompany his retirement.

Angelo Mozilo, CEO of Countrywide Financial Corporation was scheduled to receive
over $36 million in cash, a consulting contract with his company worth an estimated
$400,000 a year, and such perks as the use of a corporate plane when he retired.
His company was recently sold to Bank of America as it reportedly teetered on
the edge of bankruptcy, and it is doubtful that Mozilo will have any choice
but to retire.

The CEO has received a lot of the blame for the near demise of what had been
the company's largest mortgage company. Mozilo engineered the company's
aggressive entry into the subprime market early in the decade.

He has also been under scrutiny
by the Securities and Exchange Commission for stock sales he made as the company
that he founded was beginning to struggle with subprime losses and he is among
several financial industry bigwigs who have been invited to appear before the
House Oversight and Government Reform Committee for a hearing on executive compensation.

Despite his decision to forgo the severance money Mozilo will still leave with
full pockets. He entitled to a pension plan and an executive retirement plan
that was estimated to total $23.8 million in December 2006, the latest information
available. He also has over $20 million in deferred compensation and an estimated
$5.8 million in company stock.

Countrywide
was acquired earlier this month for $4.1 billion in Bank of America Stock.
Mozilo was not slated to receive any additional compensation tied to the sale.

Comments

First of all, the CEO is not the one that signed your loan docs.... you did. The reason Countrywide and other banks lost so much money is because they made loans to people who really didn't deserve them in the first place, they do not make enough money and/or have bad credit. The rates are higher to offset a higher default rate.
Secondly, their compensation packages would hardly dent the billions in losses.
I know several agents and brokers still making plenty of money because they are going out there and making it happen.
Stop blaming others for your problems.

lumberbroker

on

Suppose there was a RSVP request with the "Invite"?

Michigan RE Broker

on

I am trying to keep my home which is mortgaged through Countrywide. I own a real estate company in Michigan that over the last two years has lost about 70% of our business, due to Mozilo's deliberate actions that decimated our whole industry. He still is going to get almost $50 million. That is just his "golden Parachute" . What about the vice-presidents and others.
Maybe they should forgo some of that money and call a "do over" for all of the people who lives are being left in the wake for the good of corporate profits.
Or maybe they could spend some of that money training the company employees so everyone is on the same page. I have not gotten the same answer on any of my 18 calls to their "Home Retention Hotline". I actually have gotten information that is completely opposite of other information I have received. I'm not sure Countrywide really WANTS me to keep my home!!!

Anonymous

on

Re: CFC/Jon
Most buyers, especially sub-primes are not lawyers and were either honest and relied on, or dishonest and conspired with, real estate brokers who should have explained that they would be unable to pay their mortgage when the low teaser rate was bumped. I have been involved with RE for 20+ yrs. and this is the worst and most egregious pyramid of greed ever. Guilt runs from the dishonest buyer, RE broker, appraiser, mortgage broker, bank, insurer, GSE's, right up to the Wall Street criminals that knew full well what this would do, (they have very sophisticated dynamic models) and did it anyway out of pure greed.
Well, we shall see if greed is good. Expect to see RE prices fall over 30% from here before the year is over and when/if the recession hits, (i think it will) it will be very ugly. Think trying to sell PS properties back in the mid 70's -80's, you couldn't give a house away for $49K, and that is when gas was cheap, and utilities were too. A lot has changed including the ability to pay ever increasing high mortgages. Buyers are learning RE is jnot a sure thing with no risk, and also now that if no body bids up prices but always bids less, the prices WILL drop, as they should. Prices are historically way out of line, and it makes selling RE much more difficult than ever. Please, unless you know about the motivation for the willful inflating of housing and their plan to deflate it now, and make even more money in the process with more fees, don't just blame a poor buyer looking to find shelter for his/her family.
Never have so many thrifts/banks and stock brokerages been insolvent and this is after foreign investors have kicked in billions and the govt over $1Trillion in the past year. This might just turn into a full out depression worse than 1929, as just as then, there was widespread denial and an unrealistic belief that everything will be OK, but it wasn't.Best we can hope for is a business slowdown and price correction which is normal and will set the stage for a new cycle of new opportunities.

sela finau

on

I believe the subprime failure cannot be blame on one individual, one company, one industry, etc. This problem arose as a creation of the capitalist society that we live in. Call it individualism, consumerism, materialism, imperialsm, capitalism, and all of the ism's. Everyone is to blame, from the homeonwer, to the mortgage broker, to the lender, to the realtor, to the appraiser, to the title company, to the neighborhood, to the city, to the state, to the government, to the whole of society. So pick which segment of society you identify with and take accountability. The problem is here, no doubt! The question is what will you and I will do about it? thanks, sela

linh

on

RE brokers and mortgage brokers,
Please don't just blame lenders for this "mess" As an Account Executive for a lender I can share with you one thing, that is RE brokers and mortgage brokers (I've worked with more than 700 of them) often pushed me to push my underwriters or credit policy to give exceptions to loans that quite not meet the guidelines, this is how we start the "mess"
Please remember, we are in this together. Also, those who can not dedicate themselves at least 8 hours a day for their profession (RE or mortgage) please GET OUT. Partimers often get in and out of the business due to greed and ignore the consequences.

Anonymous

on

As a current BoA employee in mortgage sales and former Cwde employee, what I see internally is a big difference in the expectation of the employee. Over a period of about 4-5yrs with Cwde, I saw the required units per employee double. Turnover became high and the new people coming in thought we were crazy for putting up with it. Mngmt didn't care about us, it was all about the #'s. Now it's come back to bite them. The mortgage mkt changes have to do with credit risk evaluations. Cwde has fealt that as we all have but to go from #1 a yr ago to near BK.... that could be more closely related to the narrow focus of just the figures.

Curt Pifer

on

As the owner of a third party loss mitigation company for over five years, I have a birdseye view of consumers, realtors, mortgage brokers and mortgage banks. And the hoaxes just keep on coming. How much lipstick can you slap on the mortgage pig? Why aren't investors suing hedge fund managers? Why aren't any government overseers and regulators being fired? How is it that directors and top executives of these publicly traded mortgage fraudsters aren't going to jail? Where was the yellow press when Ameriquest and HSBC were fined hundreds of millions of dollars forcing Ameriquest out of business and HSBC to reorganize its management offshore? This is all a big joke. My company tried to participate in the first Project Hope over three years ago. What a joke. My company attempted to participate in FHASecure. What a joke. Hope Now is doomed to abject hopelessness as well. Counrtywide and Option One have shipped out customer service to India and those poor Indian folks, who are largely unhelpful, are taking the brunt of the American homeowners frustration and anger. That's "Anti" Customer Servicer not very hopeful, it's a roadblock for the servicers. So the six major servicers and Congress are holding hands and singing Goom-by-ya (or whatever) over "Hope Now" fully in the know that there is not enough infrastructure to handle a consumer onslaught far more awesome than the failed Project Hope. The phones are going to be so stacked up and backed up NOBODY will be able to cope. The lucky homeowners who do get in to their servicers, will end up walking away and shaking their heads in frustration as the servicers are already challenged to produce the vast amount of paperwork needed for a single solution. Now, do you think they are going to cope with MILLIONS of work outs? HAH! What a grand joke. Hey, what about the 96% of mortgage loans that are performing? Am I missing something somewhere? So now the "big six" is going to place a moritorium on foreclosures to help the poor consumer. Yeah, right. It's more like they are giving themselves a little time cush so they can cherry-pick the most collectable mortgage dollars. Sooo-eeee! Here piggy piggy.

Luis Pezzini

on

So why are there so many homeowners delinquent on their mortgages? Real simple - people already live paycheck to paycheck, then they encounter unforeseen circumstances that affect their ability to pay a mortgage in a timely manner. The Mortgage Industry defines these situations as 'Hardship Conditions': Temporary job loss, medical illness or injury, marital difficulties, unforeseen repairs or high utility rates, tenant problems, even a death in the family. Just one of these situations can have a direct bearing on making home mortgage payments

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